Wednesday, December 6, 2017

Recent Buy, December 2017

Admiring the Furniture Gremlin here to talk about my recent buy.  It has been a very busy couple of weeks going between the holidays, which means breaking down the past one and setting back up for the next one.  On top of that I have several work related functions, including another professional test that are eating into my time.  Not to mention a baby Gremlin with his own demands and needs.  Keeping up with exercising, the market, and everything else I enjoy is harder.  It makes me want to work not only harder, but also smarter so I can get as much time back as possible.  So in working smarter one typically acquires new skills and knowledge.  So here is a new bit of knowledge I am adding to the pile, which will contribute financially:
Today, I added a new position by purchasing shares of Leggett and Platt (LEG) in my Roth account.  I bought 25 shares, with a total cost of $1,159.08 ($46.09 / share, plus commission).  The current yield is 3.12%.  The P/E ratio for LEG sits today at approximately 19.23, trailing.  This is about the same as the historical 5 year average for the stock with the average yield being 3.12% and significantly better than average P/E being 28.07.  LEG boasts a trailing payout ratio of approximately 56.7%.  LEG has 46 years of dividend growth and is a member of the Dividend Champions.  This purchase will add $36.00 to my 12-month forward income.

LEG has provided dividend increases for a long time, and generally averages around 4% dividend growth each year.  LEG is a well known company, so most people probably know what they do.  In case you don't here is a description in their words:

"Leggett & Platt Inc is a manufacturer that conceives designs and produces engineered components and products found in homes, offices, retail stores, automobiles and commercial aircraft."

LEG is my first Consumer Discretionary company housed in my Roth account.  LEG makes mainly furniture, of all shapes and sizes.  The residential and industrial components have plateaued, but their commercial and specialty groups have ballooned.  I believe they will ride those two groups to be a major continuing success.  The commercial group supplies automakers, airplanes, trains, etc. and the amount of those will only go up the more people there are in the world moving around.  In addition, their specialty line fills in a lot of niches that are hard to fill otherwise.

Humans are more concerned about better furniture - make sure it is ergonomic, comfortable, useful, stylish, and portable - and with burgeoning growth in terms of both world population and wealthy segments of that population this growth in success will continue.  Lastly, this is also not an industry I see poised to lose out to internet mania.  Perhaps one day robots will need a chair and an ottoman to rest their feet (or circuits), but now is not that time.

I will update my portfolio page at the end of the month.

What do you think of LEG? 

- Gremlin
- Long LEG


  1. I like this LEG buy. It's a solid long time dividend payer and raiser in a business that's not sexy but needed. I actually considered this stock for my own portfolio a long time ago but never bought it. Perhaps it's time to revisit this name especially with a yield north of 3%. That's pretty juicy. Thanks for sharing.

    1. Keith,

      Thanks for the comment. I agree with everything you said, this business is practically the definition of unsexy, but necessary. 3% is very nice for the stock too!

      - Gremlin